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CDC to invest $25 mn in Tata Housing’s affordable projects unit

30 May, 2016

The UK government-owned development finance institution CDC will invest $25 million (Rs 168 crore) in the affordable housing projects of Tata Housing Development Company, the Indian developer said in a statement.

CDC joins International Finance Corporation (IFC), the private-sector investment arm of the World Bank, in investing in Tata Value Homes projects. IFC had, in May last year, agreed to invest the same amount to fund Tata Value’s affordable group housing projects. The developer had then said that the proceeds would be to build about 16,800 homes over 10 years.

The investment from CDC will help Tata Value meet its commitment toward delivering quality living spaces to low and middle-income groups in the country, Brotin Banerjee, CEO and managing director of Tata Housing, said in the statement.

Tata Value Homes is developing projects under two brands – Shubh Griha and New Haven. It is also developing a Mediterranean-themed project at Santorini, near Chennai, and La Montana near Telegaon, Pune. Its projects start from Rs 12 lakh in Ahmedabad and go up to Rs 62 lakh in Pune spanning across low-cost and mid-income segment.

IFC has ramped up its activity in affordable housing segment lately. Apart from backing projects of Bangalore-based Value & Budget Housing Corporation, it has formed a $140 million joint investment platform along with Standard Chartered PE and Asian Development Bank to develop affordable housing in India.

IFC is also supporting mortgage lenders that offer loans for low-cost houses. Earlier this month, the World Bank arm said it would invest about $40 million in Repco Home Finance Ltd. In April, IFC said it would invest $38 million in three housing finance companies in India—Aspire Home Finance Corporation, Micro Housing Finance Corporation and Aptus Value Housing Finance India Ltd.

A slew of developers have launched affordable housing projects in recent years, either through a separate arm or under the same brand, given the push by the Narendra Modi government to provide housing to all. In its latest budget, the government announced several incentives for both developers and home buyers to boost affordable housing.

CDC’s bet on the Indian real estate market comes at a time when global investors, especially pension and sovereign funds, are pouring in capital to tap into the long-term potential of the sector. The sector attracted $2.8 billion, a seven-year high, in investments in 2015, according to VCCEdge, the data research platform of VCCircle.

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CDC to invest $25 mn in Tata Housing’s affordable projects unit

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